Adidas responds to report of factory labor violations

In an ongoing conflict over labor violations by a company subcontracted by Adidas, the sports giant released a response Thursday denying liability for $3.4 million in severance pay owed to more than 2,800 workers.

The apparel company – which is contracted to provide University of Wisconsin apparel and equipment for all sports teams – issued a statement denying responsibility for actions taken by a previous owner of the Indonesian factory PT Kizone after it closed abruptly and left thousands of workers unemployed.

Two weeks ago, Interim Chancellor David Ward asked for a response from Adidas after the investigative organization Worker Rights Consortium released a report that found PT Kizone violated codes of conduct when its owner fled without paying workers.

In the statement, Adidas said it is committed to adhering to UW’s “strict code of conduct,” but that it ultimately will not take responsibility for the actions taken by the former factory owner because it upheld its part of the contract and made no violations.

“The central fact remains that the PT Kizone factory was illegally closed and abandoned by its owner, not by the Adidas Group, and this occurred more than six months after we placed our last order with them,” the statement said. “Enforcing the rule of law is core to sustainable business and we cannot be held responsible for someone else breaking the law.”

This response is consistent with the WRC report, which included Adidas’ previous claim that it was not liable since the violations occurred after it left the factory and that it is not responsible for actions taken by subcontractors.

Student Labor Action Coalition member John Perkins said Adidas’ claim of no responsibility is in violation of the university’s code of conduct, and the group intends to put pressure on Ward to take action.

“Adidas has the market power to set standards for how the factories they contract out to should treat their workers, and our labor code of conduct – like that of other universities – says the licensee has to take responsibility for the actions of subcontractors,” Perkins said.

Perkins said SLAC members will go to Ward’s office today to convince him and the Labor Licensing Policy Committee to take action against Adidas. He said the group will encourage Ward to put Adidas on another 90-day notice to pay back the workers, and if Adidas still refuses to accept liability, he should cut ties with the apparel company.

The Adidas statement also said the company aims for transparency in enforcing workplace standards and that it is “sympathetic to the plight of the workers and their families.” With this, Adidas said it met with the union representing the workers this week and is scheduling meetings with embassies in Jakarta, Korea and the United States.

The company also said it is encouraging Adidas suppliers near the PT Kizone location to hire the former workers in addition to funding an independent job placement agency to work with the former workers. Thus far, Adidas says almost 950 former PT Kizone workers have found jobs – 300 of which are at other Adidas suppliers.

Vice Chancellor for University Relations Vince Sweeney said in an email to The Badger Herald Thursday that the university is currently reviewing the document from Adidas but does not have a response at this time.